Social Security Financing. Ludo CASTRO Adviser

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1 Social Security Financing Ludo CASTRO Adviser

2 Survey The present-day social security financing The causes of its complexity The establishment of a budget The social security reserves

3 Assignment budget Global management

4 Werkgeversrekeningen 2003 Percent 2011 Percent Totaal van de ge nde bijdragen , ,27 Totaal van de vorderingen ,91 0,54% ,34 0,29% Oninbaar verklaarde bijdragen ,17 0,29% ,24 0,35% vorderingen + Oninbare bijdragen ,08 0,82% ,58 0,64%

5 The budget in figures 2011 BBP 355,89 mrd Entiteit I FOD financiën belastingen 101,4 SZ Bijdragen 51,4 lening 42,5 Alt. Fin. 16,7 143,9 Staatstoelagen 21,9 EU 2,6 Diversen 3,8 Alt. Fin 16,7 93,8 Gem & Gew. 38,5 Eigen begroting 86,1 Gbwerk 63 Gbzelfst 6,2 Entiteit II Gez 4,8 RSZ 46,3 Bijstand 3,1 Gemeenschappen 20,18 Overheidspensioen 12,1 Brussel 0,62 Rest 4,6 Gewesten 12,27 Overdrachten 38,5 71,57

6 Social security system for salaried workers Global Management RJV FSO FBZ Arbeiders RSZ Bedienden Ambtenaren HVKZ GLOBAAL BEHEER Gesco's RSZ-PPO PDOS FBZ Gezinsbijslag PDOS Gezinsbijslag

7 Financing of the Global Management in 2011

8 Global management Components of the financing Contributions Appropriated receipts State allowances Alternative financing Sundries

9 What are the elements constituting the financing in 2011 (measures not included)? 10% 0% 21% 2% 67% Bijdragen Toegew ezen ontvangsten Alternatieve financiering Rijkstoelage Diversen 2011 Contributions Appropriated receipts Alternative financing State subsidies Sundries

10 What are the elements constituting the in 2011 (measures included)? 9% 0% 5% 20% 2% 64% Bijdragen Toegewezen ont vangst en Alt ernat ieve f inanciering Rijkst oelage Diversen Crisismaat regelen 2011 Contributions ,26 Appropriated receipts ,00 Alternative financing ,00 State subsidies ,00 Sundries ,00 Antic-crisis measures , ,26

11 Social contributions

12 Calculation of the social security contribution Net wages Withholding tax on income Pers. con- Tribution Employer s contribution Gross wages Social contributions

13 Usual contributions ARBEIDER BEDIENDE werkn. werkg. werkn. werkg. Pensioenen 7,50 8,86 7,50 8,86 Gezondheidszorg 3,55 3,80 3,55 3,80 Uitkeringen 1,15 2,35 1,15 2,35 Kinderbijslagen 7,00 7,00 Werkloosheid 0,87 1,46 0,87 1,46 Jaarlijkse vakantie 16,27 Beroepsziekten 1,00 1,00 Arbeidsongevallen 0,30 0,30 Loonmatiging 7,48 7,48 Educatief verlof 0,06 0,06 Kinderopvang 0,05 0,05 Asbestfonds 0,01 0,01

14 Usual contributions variations Domestic servants Recognized apprentices Schoolable workers Subsidized contract employees Occasional jobs Various categories

15 Complementary contributions Outside the scope of the Global Management Fund for the closing of enterprises Social security funds Child care Paid educational leave Outplacement Economic unemployment Asbestos fund

16 Complementary contributions Global Management Conventional early retirement Contribution Pseudo-early retirement Extralegal pensions Risk groups Guidance of the unemployed Temporary unemployment and elderly unemployed Company cars Solidarity contribution on profit-sharing Solidarity contribution for student workers Contribution on non-recurrent result-based benefits Solidarity contribution on traffic penalties Solidarity contribution due because of a late DIMONA declaration Special social security contribution

17 Special social security contribution Quarterly advances through the Dmfa declaration The family situation plays a role The contribution rate fluctuates in accordance with the wage level Annual fiscal statement Depends upon the annual taxable income 2011 RSZ RSZ-PPO Saldo Financiën

18 Contribution reductions

19 Contribution reductions As from the first quarter of 2004 harmonization on the basis of the program-law of December The core element is the structural contribution reduction R= F + x (So-S) + x (W-S1) Seven target groups Elderly unemployed Elderly bonus Long-term job-seekers First recruitments Younger workers Reduction in working time four-day week Restructuring Trainers and tutors

20 Structural reduction Structurelle - Catégorie Structurelle base Cotisations patronales Réduction de base "R" ( ) Rémunération trimestrielle équivalente "S" ( )

21 Contribution reductions Structurele vermindering forfait lage looncomponent hoge looncomponent Doelgroepen Werkbonus Diverse bijdrageverminderingen Sociale MARIBEL

22 State allowance

23 Complementary to the contributions Initally meant to build up reserves Social policy financing Budgetary balance (from the end of the seventies onwards)

24 Law of December containing social provisions State allowance fixed at 4,754,880, 000 (192 billion BEF) Amount frozen - period (F. Busquin) Apportionment RVP (pensions) 1,797,234, % RIZIV health care 4,887,634, % RIZIV benefits 648,260, % RVA (unemployment) 421,752, % This period was extended until 1997 (Global allowance NSSO-GM) As from the year 1997, its amount is reduced to 188,2 billion BEF (4,659.6 million ), financing of the career break and the rehabilitation schemes and the residual part is annually linked to the index law of July This amount serves to finance several envelopes introduction of the social identity card, wage moderation, police reform, Globalization of the state allowances Mine workers and Seamen

25 Alternative financing

26 g van de alternatieve financieringvoor de SZ Enkele cijfers ingsresultaten 2010 opbrengst alternatieve financiering SZ TW-ontvangsten mio => mio 50,1% zen op tabak mio 921 mio 47,0% de voorheffing mio 378 mio 15,0% al Beheer werknemers beschikbare middelen RSZ-GB mio SALDO en RSZ-GB mio -'413 mio atieve financiering GB werknemers waarvan aan : RSZ-GB RVA-GB RIZIV (werknemers) mio mio 3 mio mio

27 Procentuele verdeling van de alternatieve financiering aan de SZ 2010 BTW 88,57% Personen- en vennootschapsbelasting 1,23% Accijnzen (op tabak) 6,48% Taks op verzekeringsverrichtingen 0,02% Roerende voorheffing 3,29% Belasting op werknemersparticipaties 0,07% Belasting op aandelenopties 0,35%

28 B RSVZ RIZIV RSZ-GB RSVZ-GB dienstencheques WN 623 io 190 mio mio mio 278 mio 5% tijdel. werkloosh. 71 veiligheidscontracten 41 ligdagprijs geneesk. educatief verlof 45 ziekenh. verzorging compensatie politiezones mio 847 mio adm. omkadering PWA 20 asbestfonds 10 REST samenw. akk. soc. econ. 14 verhoging min. pensioen 47 WAARVOOR IS DE ALTERNATIEVE FINANCIERING AAN DE SZ BESTEMD? miljoen BIJDRAGEVERMINDERINGEN RSZ-GB (incl. werkbonus) miljoen ZONDHEIDSZORGEN BEGROTINGSEVENWICHT SPEC. UITGAVEN miljoen miljoen 914 miljoen

29 eserves

30 RESERVES Fonds toek. Gez. verzorging Reservefonds

31 Components of the reserves in 2011 miljoen overdrachten w aardeverm eerde ring opname overschotten

32 Procedure Budget conclave Receipt and expenditure budgets of entity I General explanatory note Prefiguration of the social security budget Management Committee Social Security - Global management Receipts and expenditure of the social security for salaried workers Receipts and expenditure for the health care scheme for salaried and self-employed workers merged since the year 2008

33 General scheme budget ipt/expenditure budget Administrative budget Economic budget Provisional prefiguration GLOBAL MANAGEMENT Multiyear estimates Circular Prefiguration administrative budget Governmental measures / Economic budget Prefiguration GLOBAL MANAGEMENT Report to the Government Economic budget Budget control Report to the Government Circular Initial budget Budget adjustment Definitive budget

34 Establishment of the assignment budget Global Management Economic budget Planning bureau provides parameters BBP Arbeidsproductiviteit Tewerkstellingscoëf Groei loonmassa Index Wagedrift Looncoëf. Apply growth hypotheses to the most recent results (FTE, average wage, salary costs) Calculation of the contributions Simulation of the contribution reductions Integration of the governmental measures Value assessment of the reserve portfolio Management expenses Integration of other receipts (Finance) Integration of needs expressed by the public institutions of social security (OISZ/IPSS) Special allocations 2012 Bijdragen ,32% Rijkstoelage ,70% Alternatieve financiering ,03% Diversen ,38% Beheerskosten ,27% Lening ,16% Beschikbaar Bijzondere toewijzingen ,26% ,74%

35 The emergence of the complexity

36 Features of the 1969 financing Insurance aspect Contribution calculation in practically all sectors limited to a determined earnings limit State intervention In substitution for missing contributions Ancillary Autonomous sectors enjoying proper reserves

37 The seventies and the first oil shock The earning limits are raised and in the end gradually phased out. (As from the 4 th quarter of 1982 all contributions are calculated on an unlimited wage) The State allowances are linked to the State budget balance Limited through organic laws The law of June on the general principles provides for new criteria Reduction of State allowances in sectors presenting a surplus

38 The eighties: the sectoral finance is abandoned Establishment of the Financial Equilibrium Fund (FEF) Wage moderation contribution, special contributions Arrears of the municipalities Transfers between sectors The State allowances earmarked for the unemployment scheme are replaced by contributions, the State allowances in favour of the pension sector are abolished MARIBEL

39 The nineties and the convergence plan Centralization of various financing sources at the NSSO within the scope of the Global Management Development of the alternative financing Ending of the sectoral financing Special financing mode for the health care branch

40 Features of the 2011 financing The insurance aspect has practically completely disappeared The State intervention is very diversified and oriented towards a global balance. Unlike the objectives of the Global Plan the global financing is poorly transparent As from 2012 there is a structural deficit of 4 billion

41 The impact of the economic crisis

42

43 000 Evolutie aantal arbeidsplaatsen en arbeidsvolume in VTE tov gelijkaardig kw artaal voorgaand jaar VTE Effectieven /1 2004/3 2005/1 2005/3 2006/1 2006/3 2007/1 2007/3 2008/1 2008/3 2009/1 2009/3 2010/1 2010/3 2011/

44 Evolutie aantal arbeidsplaatsen en arbeidsvolume in VTE tov gelijkaardig kw artaal voorgaand jaar eff_privé 'eff_overheid' VTE_privé VTE_Overheid /1 2005/2 2005/3 2005/4 2006/1 2006/2 2006/3 2006/4 2007/1 2007/2 2007/3 2007/4 2008/1 2008/2 2008/3 2008/4 2009/1 2009/2 2009/3 2009/4 2010/1 2010/2 2010/3 2010/4 2011/1 2011/

45 Evolution of the employment figures per statute

46 Kasprofiel 2008 en

47 After 40 years of crisis financing From an autonomous mode of financing Oriented towards the attainment of a certain level of social protection To a constraint financing mode Budget balance entity I Competitiveness Employment

48 감사 에 너 주의